His Royal Highness Prince Turki al-Faisal instructed, in detail, the new administration what to do:

Condemn Israel's atrocities against the Palestinians and support a UN resolution to that effect; condemn the Israeli actions that led to this conflict, from settlement building in the West Bank to the blockade of Gaza and the targeted killings and arbitrary arrests of Palestinians; declare America's intention to work for a Middle East free of weapons of mass destruction, with a security umbrella for countries that sign up and sanctions for those that do not; call for an immediate withdrawal of Israeli forces from Shab‘ah Farms in Lebanon; encourage Israeli-Syrian negotiations for peace; and support a UN resolution guaranteeing Iraq's territorial integrity. Mr Obama should strongly promote the Abdullah peace initiative.

Finally Turki notes that Iran's Mahmoud Ahmadinejad has called on "Saudi Arabia to lead a jihad against Israel [that] would, if pursued, create unprecedented chaos and bloodshed." He soothingly notes that, "So far, the kingdom has resisted these calls," but then reiterates his threat a third time: "every day this restraint becomes more difficult to maintain. … Eventually, the kingdom will not be able to prevent its citizens from joining the worldwide revolt against Israel."http://www.danielpipes.org/article/6151

Bloomberg is allegedly reporting that Bernanke is "contemplating" buying the long end of the Treasury Curve due to "bond market instability."

There is nothing "unstable" about any of this. Rates are going higher. Why? Gee, let's see, Obama says he's going to blow $1 trillion on a "stimulus" package, the other $350 billion of the TARP was released, the GAO says we're going to run well north of a Trillion in deficits, and people are wondering why the bond market expects the government to pay up in higher interest rates for the right to borrow more than 10% (and that's almost certainly a LOW estimate) of the total outstanding debt in one freaking year after having added 16% in the last one?

You're kidding, right? America is acting like a subprime credit-card customer who has decided to go nuts in the local "bigbox" electronics retailer, and the market is (appropriately) reacting to that by repricing RISK.

We’ve been repeatedly noting that the fastest, fairest, cheapest, most efficient way out of the current credit and financial mess is Nationalization.

As we have seem over the past few weeks, the country’s biggest banks — Bank of America and Citigroup — are deteriorating rapidly. They will need far more bailout money beyond the $350 billion of taxpayer cash and guarantees they have already received.

Note that the money already dumped into the black holes of these two financial institutions far exceeds their net worth. And in exchange for this foolish investment, taxpayers have received just 6% of Bank of America, and 7.8% of Citigroup. This is absurd. How a 120% of a company’s market cap yields a single digit ownership stake is beyond my comprehension.

The solution to the banks problems, as well as this ridiculous investment posture, is relatively simple: Nationalize the banks, appoint new management, give them 6 months to spin out 10% of each of the separate viable pieces, with the taxpayer retaining the rest as passive investors. For Bank of America, they can spin out 5 major pieces: BoA, Merrill, Countrywide, a Toxic holdings company, and a Good holdings company. The derivative exposure gets wiped out, put into the toxic holding section.

Stock holders get nothing; Since bond holders would receive some pro-rata share in a liquidation, they get a convertible preferred in the new debt free firm, as well as an opportunity to lend to the new banks at an generous convertible rate.http://www.ritholtz.com/blog/2009/01/nationalize-now/

This idea of bank nationalization is such a laugh...oh yeah it will just be temporary...then we will recreate the world as it was...if you buy that I have some prime California property to sell you...

Here is the relevant quote from the NYT article Ritholtz quoted:

"The argument in favor of nationalization, even a brief nationalization of a few months or years, is straightforward: It might be the only way to pull America’s largest financial institutions out of the downward spiral that makes it enormously difficult to raise the capital they need to keep operating."http://www.nytimes.com/2009/01/26/business/economy/26banks.html?_r=1

Might I ask...What about the little banks & thrifts?

Let's cut the bull and be honest. This is a complete revamp of the banking system as we know it. Even if it were brief (2 years or less) - How could you recreate the previous structure? 20,517+ banks, thrifts, and credit unions all rolled into one to four major banks then nationalized or controlled by "one" government...and then separated back out into the various entities???

And those power hungry schmucks are suddenly going to turn lose of the reigns once they get their hands on them? Yeah and Hitler was a pacifist!

Jan. 26 (Bloomberg) -- Shannon Luhrsen, a stay-at-home mom in Wilmington, North Carolina, can't understand why she should pay 5.8 percent for her mortgage when her local bank gets money from the Federal Reserve at little more than 0 percent and the U.S. government is borrowing for 10 years at 2.6 percent.

“I want to get in the 4s,” Luhrsen said. “That would be fantastic. I don't want the bank to have my money. I want to have my money.”

RIGA, Latvia -- On a frigid evening this month, more than 10,000 people gathered outside a 13th-century cathedral in this Baltic capital to protest the government's handling of Latvia's economic crisis and demand early elections. The demonstration was one of the largest here since the mass rallies against Soviet rule in the late 1980s, and a sign of both the public's frustration and its faith in the political system.

But at the end of the night, as the crowd dispersed, the protest turned into a riot. Hundreds of angry young people, many drunk and recently unemployed, rampaged through the historic Old Town, smashing shop windows, throwing rocks and eggs at police, even prying cobblestones from the streets to lob at the Parliament building.

Similar outbursts of civil unrest have occurred in recent weeks across the periphery of Europe, where the global financial crisis has buffeted smaller countries with fewer resources to defend their economies. Especially in Eastern Europe, the turmoil reflects surging political discontent and threatens to topple shaky governments that have been the focus of popular resentment over corruption for years. http://www.washingtonpost.com/wp-dyn/content/article/2009/01/25/AR2009012502516.html

Foreign Minister Ingibjorg Gisladottir's Social Democratic Alliance Party had threatened recently to withdraw from the government.

Haarde told reporters Monday he would speak to Iceland's president to formally dissolve the government.

Haarde's government has nationalized banks and negotiated about $10 billion in loans from the IMF and individual countries. In addition, Iceland faces a bill likely to run to billions of dollars to repay thousands of Europeans who held accounts with subsidiaries of collapsed Icelandic banks.

The country's commerce minister, Bjorgvin Sigurdsson, quit on Sunday citing the pressures of the economic collapse. Sigurdsson, a member of Gisaldottir's party, said Icelanders had lost trust in their political leadership.

Thousands have joined noisy daily protests in the last week over soaring unemployment and rising prices.

Brilliant, absolutely brilliant - "we haven't done so well in the past with your money but we intend to do better in the future" - despite the stupidity of that statement let me highlight another fact...I think Ron Paul is one of the few, if not only, member(s) of Congress who actually demands to read the bills before he will vote on them. Working stiffs is a good analogy for Congress!

The Federal Reserve is struggling to explain its plans for pulling the U.S. economy out of recession as it resorts to unorthodox policy tools while official interest rates are set near zero.

Since a rate-setting meeting in December, several U.S. central bank officials have tried to lay out what the Fed can do now that it has run out of conventional ammunition to support economic growth.

Usually, the Fed can focus its policy message around its interest rate target, but with federal funds already close to zero that capability has disappeared with no clearly discernible substitute on the horizon.

"It is very difficult to communicate the nature and effects of unconventional balance sheet actions," Glenn Rudebusch, associate director of research at the San Francisco Federal Reserve Bank said in a report earlier this month.http://www.cnbc.com/id/28816745/site/14081545

If it is difficult to communicate the nature and effects...hmm doesn't that say it all???

I did some analysis on the auto industry several years back. At the time, 2004, there were 2.5 registered and licensed vehicles for every household in America. The average household consisted of 2.1 individuals. Considering that 80% of the population lives in large metropolitan areas with plenty of public transportation...I'd say there is a glut of automobiles out there.

Jan. 26 (Bloomberg) -- Smurfit-Stone Container Corp., a maker of cardboard packaging and one of the world’s largest paper recyclers, filed for bankruptcy in the face of falling demand and heavy debt payments.

Awesome! That will give them a chance to reorganize before they start building DIY houses.

California could pay the price for the foreclosure crisis for years to come, thanks to Proposition 13, the 1978 voter initiative that caps property taxes.

As banks feverishly dump foreclosed homes at cut-rate prices, and as neighboring homes change hands at similar bargain-basement rates, those amounts are enshrined as the new basis for determining property tax until the homes are sold again. Under Prop. 13, that basis can rise a maximum of just 2 percent a year, even if the home is worth significantly more. The consequence is likely to be a revenue crunch for the public services funded by property tax revenues.http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/25/MNV7155VSC.DTL&type=business